Ex-Brazil finance chief held, freed for now in fraud probe

AP News
Posted: Sep 22, 2016 4:13 PM
Ex-Brazil finance chief held, freed for now in fraud probe

RIO DE JANEIRO (AP) — The ex-finance minister under Brazilian presidents Dilma Rousseff and Luiz Inacio Lula da Silva was arrested Thursday in the corruption scandal at state-run oil giant Petrobras, but a judge allowed him to be freed while his wife had cancer surgery.

Lower court Judge Sergio Moro decided that the investigation would not be harmed by the release of former minister Guido Mantega during his wife's procedure. Mantega has been accused of asking tycoon Eike Batista for bribes on behalf of the Workers' Party in 2012 in exchange for government approval for two oil platform contracts.

Mantega's attorney Jose Roberto Batochio denied any wrongdoing by his client, who was arrested at the hospital where his wife was about to undergo an operation at a Sao Paulo hospital. Prosecutors called the timing of the arrest "an unfortunate coincidence" and the judge decided to call off the detention for now.

Rui Falcao, the chairman of the Workers' Party, said that arresting Mantega just as his wife was to enter the operating room was "inhumane."

Investigators also searched Mantega's Sao Paulo house in the case, which federal police says accuses Mantega and seven other people of corruption, fraud, criminal association and money laundering.

Mantega became finance minister in 2006 during Silva's presidency and left at the end of Rousseff's first term in 2014.

He also served as Petrobras chairman of the board, an influential company position traditionally held by a key Cabinet member, during Rousseff's first term. Investigators said the former minister is suspected of acting as middleman for bribes used to pay the left-leaning party's political marketing specialist Joao Santana, who is currently jailed.

Prosecutors and police investigators told a Thursday press conference that Batista, who was once Brazil's richest man, has said Mantega asked for $2.3 million worth of donations to the Workers' Party.

The investigators suspect that money was to be tied to contracts for the construction firms that were going to build the oil platforms — Mendes, and OSX, which Batista owns.

Investigators said Batista delivered documents and testimony of his own accord, but denied paying any bribes himself. Batista's attorney Ary Bergher did not immediately respond to requests for additional comment.

The decision calling for Mantega's arrest was made by judge Moro in the southern city of Curitiba in August, but was not carried out until Thursday because of delays associated with the recent Olympic Games in Rio de Janeiro. Moro is considered an anti-corruption hero by adversaries of the Workers' Party.

Mantega's arrest and release is the latest turn of events in the ongoing scandal that has engulfed the party.

Rousseff was removed from office less than a month ago following impeachment proceedings and Silva has been accused of corruption and ordered to stand trial in two cases related to the Petrobras scandal.


AP writer Adriana Gomez Licon contributed to this story.